Question

34. A MasterCard statement shows a balance of $510 at 13.9% compounded monthly. What monthly payment will pay off this debt in 1 year 4 months? (Round your answer to the nearest cent.)

Answer 1

The monthly payment is $35.10.

Explanation:

p = 510

r =
`13.9/12/100=0.011583`

n =
`12+4=16`

The EMI formula is :

`(p* r*(1+r)^(n) )/((1+r)^(n)-1 )`

Now putting the values in formula we get;

`(510*0.011583*(1+0.011583)^(16) )/((1+0.011583)^(16)-1 )`

=>
`(510*0.011583*(1.011583)^(16) )/((1.011583)^(16)-1 )`

= $35.10

Therefore, the monthly payment is $35.10.